In the spirit of transparency, we are posting our Cost Plus Reimbursement Schedule here:
Facilities: Cost Plus 12%
Physicians LOA: 115% RBRVS
Physicians: 100% RBRVS
Out-patient Rx: 100% Pass Through
Editor’s Note: Cost Plus payment is fair and reasonable. Most will agree, except hospitals. They are used to getting paid much more, much much more. For example, an actual claim for a pre-mature baby is eye opening: Billed charges were $450,000 (For those of you in Bluster Bunns, Montana, billed charges are whatever a hospital says they are, have no earthly or reasonable relationship to cost, and is the same strategy employed by automotive manufacturers). We ran this claim through a PPO contract we were privy to (a large national PPO) and the allowed charges reduced to about $250,000. Hey, not bad, right? But, when we ran the claim through our data base, using the hospital’s own cost report on file with the federal government, and adding a 12% profit margin (hey, we all deserve to make a reasonable profit), our employer’s self-funded medical plan cut a check to the hospital for about $98,000.
Concluesion – hospitals and car dealerships employ the same insane pricing strategies – the only difference is that hospitals dont employ salesmen (or are PPO’s acting as their salesmen?).
